I can see SRGs view and if BA manage to hold sway then this would not be a case of denied boarding.

However, looking at this from the passenger's point of view, she was denied boarding because she did not know that her ticket had been cancelled.

Using the terms "if" and "then" once again therefore!....

If the passenger were to go to small claims then I suspect that she will either reach an out of court settlement with BA or the court will find in her favour.

IMHO, with the facts presented as they are, I think that BA should have settled higher and quicker than this because one's instant reaction is that an injustice has been done. Since BA have clearly admitted fault and shown a willingness to settle, the extra mile they could have gone to avoid messy PR would have been a cheap and simple step. As it stands they have compounded the error by leaving the passenger (and anyone who reads the story) with an on-going sense of injustice. This does not put BA in a good light.